The boss of a North East vehicle services group formed through a merger two years ago has hailed its success, after posting rising revenues and profits.
North East vehicle hire business Redde Northgate said strong customer demand had driven up revenues 12% to top £1.24bn. The Darlington group, which has operations across the 海角视频, Ireland and Spain, was created through the merger of light commercial vehicle hire business Northgate with support services company Redde, a move designed to create a market leading mobility solutions company.
As a whole, Redde Northgate services customers through a network and fleet of over 126,000 owned and leased vehicles, supporting over 600,000 managed vehicles, with around 175 branches across the 海角视频, Ireland and Spain and a team of over 6,700 employees.
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The group has now posted a 12% rise in revenue including vehicle sales to £1.24bn for the year ended April 30, as well as a 62% rise in underlying pre-tax profit rose 62% to £151.3m. The company said the rise was driven by customer demand, the post-pandemic recovery in business volumes and traffic activity, plus lower disposal of its fleet in the face of the continuing global shortage of new vehicles.
Excluding vehicle sales, revenue grew 24%, due to increased customer activity across all business units. Earnings per share were up 55% from 26.6p to 41.3p.
CEO Martin Ward said the combined firm is now proving itself to be attractive to a broad spectrum of blue-chip customers and that it is now “a long way from a white van man company”.
He said: “The key message from today’s results is that the merger has exceeded expectations and fully transformed the business, and that’s reflected in the results. The combined business has created something unique, we are a market leader in what we do, but it’s moved us away from being a van rental business and accident management business to being a total mobility provider.”
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During the year the firm announced significant new multi-year contract wins, with firms including Tesco, Admiral and Acromas Insurance (Saga), reflecting the strength of its new platform offering. Contracts won in the second half of the year will add a further estimated £100m of lifetime contract revenues in addition to £200m already announced.
A number of acquisitions were also completed during the year, including ChargedEV, a specialist in the supply and installation of EV charging equipment across the 海角视频, the acquisition of a 2,000 vehicle fleet and customers from a Scottish rental business, and GRG Resources, the specialist call handling and roadside services to ‘blue light’ customers.
More bolt-on acquisitions are also set to come - including one recently completed of a North West business.
Mr Ward said: “Since the merger we’ve done five acquisitions or asset purchases. In the last few days alone we’ve acquired a business called Blakedale which is based in Leyland, which specialises in traffic management vehicles. It’s a family run business, we’ve acquired around 320 specialist traffic management vehicles and we’ve welcomed 65 colleagues who have joined the group.”
Recognising inflationary pressures, he said the company has taken a number of measures.
He said: “We recognise that cost-of-living impacts a lot of people. From our own colleagues, we recognised that when we came to do our pay reviews. We structured the highest percentage increases for our lowest paid in our workforce, and increased the minimum amount paid for new entrants coming into the business. Some of those increases were quite substantial for the lowest paid and the feedback we’ve had is that it’s helped those on lowest incomes in the business.
“When we look at our customer base we’ve got some strong relationships. We have passed price increases on, where we’ve seen the cost-of-living and inflation come to bear, but we’ve done it openly and transparently and talked about where we’re seeing those cost increases and because we know that the fleet and use of the vehicles is paramount to how they do their trade.”
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He said the new financial year has started well and the business is well positioned in its markets.
He added: “The combination of the businesses bring about different resilience to when the businesses stand alone. With that diverse customer base, from government local authorities to blue chips, large fleet operators, SMEs, we’ve got a strong customer base and we believe that with the package of services on our mobility platform is adding resilience.
“Whilst we are cognisant, and we’re not tin-eared to the fact that there could be economic challenges coming, we are seeing strong demand for our services.”